Results for Keith Fitz-Gerald
How to Profit From China’s Next Move
[Editor's Note: Guru Keith Fitz-Gerald is one of the world's leading experts on global investing, especially relating to Asia's emergence as an international powerhouse. He details the extraordinary profit potential of China - and other emerging markets - in his new best-seller, "Financial Hangover."]
For many investors who don’t have the benefit of 20 years of experience in Asia like I do, figuring out what Beijing is up to is both puzzling and difficult.
But a handy little tool called a "Form 13F" can help.
In case you’re not familiar with it, the 13F is a disclosure document that the U.S. Securities and Exchange Commission (SEC) requires institutional-investment managers to file when they hold $100 million or more of certain U.S.-listed stocks.
China’s $300 billion sovereign wealth fund (SWF) – the China Investment Corp. (CIC) – just filed its first-ever 13F with the SEC, revealing that it purchased about $9.6 billion worth of U.S. stocks last year.
And it confirms much of what we’ve been telling you since the global financial crisis began – namely that China would take advantage of the crisis by purchasing beaten-down stocks, resources, and hard assets … and in a big way.
Even more important, this filing hints at what China is likely to do next – an insight that will help investors figure out where to put their money in order to maximize their personal profits.
Five Reasons to Put Your Money In China Now
China is the greatest growth zone in economic history. The third largest economy in the world, China is projected to pass Japan in the coming year and to surpass the U.S. economy as soon as 2020. So, when you’re deciding how to allocate your investment portfolio, do you want to put your money in the U.S. – a country projected to grow by less than 3% in 2010 – or in a country that is expected to more than triple that? Here’s why I’m putting my money in China.
Why the Government Wants to Hijack Your 401(k)
It’s bad enough that we’ve been forced to bail out Wall Street. But now the Obama administration is hatching plans to raid our retirement savings, too.
To say that I’m "outraged" doesn’t come close to describing the emotions I experience every time I think about the government’s latest hare-brained scheme.
According to widespread media reports, both the U.S. Treasury Department and the Department of Labor plan are planning to stage a public-comment period before implementing regulations that would require U.S. savers to invest portions of their 401(k) savings plans and Individual Retirement Accounts (IRAs) into annuities or other "steady" payment streams backed by U.S. government bonds.
Folks, there’s only one reason these agencies would do such a thing – the nation’s creditors think that U.S. government bonds are a bad bet and don’t want to buy them anymore. So like a grifter who’s down to his last dollar, the administration is hoping to get its hands on our hard-earned savings before the American people realize they’ve had the wool pulled over their eyes … once again.
For the full details on the government’s newest financial gambit, read on…
Never “Short” a Country That Has $2 Trillion in Cash
The first rule of successful global investing – to paraphrase the words of New York Times columnist Thomas Friedman – is a simple one.
Never short a country with $2.3 trillion in currency reserves.
I’m well aware that bond king Bill Gross has been sounding the alarm about a China bubble, and that Forbes magazine is predicting a major meltdown by the Asian giant. I’ve also heard all about noted short-seller James S. Chanos – who made his name by correctly calling the Enron Corp. demise – who recently described China as "Dubai times 1,000 – or worse."
Just yesterday (Wednesday), in fact, U.S. stocks suffered their worst beating of the New Year on fears that new bank lending curbs in China might blunt the worldwide economic rebound. Asian markets also were down yesterday.
So what’s really going on here? China is making its banks tighten credit. Some of the biggest banks, I’ve heard, have actually suspended loans for the rest of January! Many analysts and media pundits believe this is the beginning of the end of the Great China Growth Story.
Don’t believe it.
How to Profit in Any Kind of Market
When it comes to the global financial crisis, many so-called "experts" think the worst is behind us. But I don’t buy it.
And I’m not alone.
Just look at what some other big-name investors – each also known for their independent thinking – are saying or doing right now:
- Bond king Bill Gross is nervous and raising cash.
- Author, commentator and global-markets guru Jim Rogers has repeatedly said that he’s not investing in stocks anywhere in the world right now.
- Hedge-fund heavyweight John Paulson is moving aggressively into gold.
- And investing icon Warren Buffett – never one known for tipping his hand – is candidly stating that the U.S. financial-crisis cleanup is far from complete. The fact that he’s reportedly buying more shares of Korean steel dynamo Posco (NYSE ADR: PKX) would punctuate this point.
Indeed, entire nations – I’m thinking specifically of China, India, Brazil, Chile and one or two others – are adopting similar stances. And they’re doing so for the same risk-fearing reasons. They want to grow their money but they don’t want to place it at risk any more than we do.
This kind of uncertainty can be paralyzing, making it tough to decide where – or even if – we should deploy our investments.
Fortunately, we’ve been here before. And what we learned will allow us to profit no matter what the financial future holds for the U.S. marketplace.
To learn the four secrets to investing success, please read on…
Will China Supersede Saudi Arabia as the Key to U.S. Oil Prices?
I bought a Toyota Prius last Saturday.
The signs are everywhere that oil is headed for stratospheric highs – $200, $250 or even $300 a barrel. Some of these signs are just plain obvious. But even the subtle indicators are telling us that some very expensive energy costs headed our way.
Let me tell you about one such indicator that I came across over the New Year holiday. A tiny news item said that Saudi Arabian oil concern Aramco is abandoning a lease on Caribbean oil storage, and further reported that PetroChina Co. Ltd. (NYSE ADR: PTR) is moving in to take Aramco’s place.
Most investors here in the West – if they even read the item – would’ve dismissed it as just another minor business transaction, one among the thousands that take place each day. But this particular deal was much more than that. It’s another indication of China’s continued global emergence. And it also underscores this country’s relegation to the growing legion of "former" world powers that have been eviscerated by the financial crisis that they created.
In case you missed the story, let me share the details, and then explain what I believe those details actually mean.
The Five Things You Need to Know About China
Legendary investor, Bill “The Bond King” Gross made headlines recently when he said that China will one day have to contend with a bubble of its own making. Gross runs the world’s biggest bond fund at Pacific Investment Management Co. LLC (PIMCO). Millions of investors reacted just as you would expect when someone of his prominence makes such a pronouncement – they panicked.
While I can see how Gross would arrive at such a conclusion, his comment about China is akin to the economist who tells us that “the U.S. economy will recover.”
In either case, just when and how isn’t clear.
Warning: You May Not be Making as Much on Gold as You Think
Millions of investors who bought gold in the last 12 months are undoubtedly very happy at the moment – considering that the yellow metal has risen 60% since last November to a recent close of $1,138.60 an ounce on Monday.
But chances are good that many won’t be smiling when they discover just what the taxman has planned for their gains.
Unbeknownst to most investors, gold is considered a collectible not a capital asset. In plain English, this means that despite the fact that many people believe they are investing in gold, the Internal Revenue Service (IRS) believes that they are collecting it.
Is Mexico the “New” China?
[Editor's Note: Money Morning Chief Investment Strategist Keith Fitz-Gerald's new book - "Fiscal Hangover" - will be published on Monday.]
When it comes to global manufacturing, Mexico is quickly emerging as the “new” China.
According to corporate consultant AlixPartners, Mexico has leapfrogged China to be ranked as the cheapest country in the world for companies looking to manufacture products for the U.S. market. India is now No. 2, followed by China and then Brazil.
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